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tv   Fast Money Halftime Report  CNBC  April 8, 2014 12:00pm-1:01pm EDT

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enjoying what's happening on twitter, not feeling like -- >> jon fortt sits at the cool kids' table at lunch. >> yes. a lonely table. >> a great dresser, and he has a gazillion followers, as well. >> way fewer than you two. >> more on that later. we'll see how the redesign is received. and for the time being, the dow is currently up. scott wapner. >> plenty of meat on the bone to discuss. you have a great rest of the day. welcome to "halftime" show. here's what's in our playbook. fire sale or falling knife. is it time to load up on facebook, netflix, and yahoo!? a top analyst says yes. paying dividends. with investors playing the safety trade, is your best move to stick with what's working? motif of the month. how to create your own portfolio from the hottest trends in investing. the man who can make that happen is here live. let's meet today's starting lineup, pete, joe, josh, jim
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leventhal, steve suttmeier is with us, as well. we begin with the nasdaq coming off the worst three-day stretch in years, rising a bit now, and racing the question of whether the sell-off in momentum names is a contagion that's likely to spread to other parts of the market. let's take that to the panel. josh brown. are we in danger of this thing starting to spread? >> i don't know. you know, when i look at the internals in the sectors that have been hardest hit, nothing there really suggests that this 3.2% overall correction that we've seen has totally run its course. but, scott, there are areas of the market that are acting incredibly well, including tech. intel and ibm are on fire. i talked about them last week. deere is breaking out. caterpillar looks great. so there are pockets where you really don't want to miss out and be out of them completely. but i think the momentum trade, maybe there's a bounce overdue here. but i still think that those look like the most vulnerable names. >> jim, i wonder if you have to
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start worrying about some of the tried and true and loved blue chip names, although josh rightly points out some of the names that have outperformed in the wake of the selling. >> i think josh has it right. those names don't worry me at all. i think this is a rotation we're going through right here. the high flyers still have a nice gain in them. i think you're rotating out of the expensive ones into the cheap ones. remember, caterpillar, ibm, those names were beaten down all of last year. it's just their time. this feels like a rotation, not a sell-off. >> pete, you look at the old-tech names, so to speak, that have held up in the face of the selling. intel, as josh mentioned, up 8%. microsoft up 4. ibm, sisco up 4. apple is not down too much. home depot holding up relatively well. worry yet about any of those names and some of the selling? >> worried about those names, no. i like those names. and when you look at the fundamental story, whether it's intel or microsoft, mcdonald's
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included, these are solid names. when you look at the fundamental story, they have a great fundamental story. they're giving some yield. yes, you're getting a little bit of that, as well. i look at microsoft, qualcomm, the chips the way they've been trading, not just today, but consistently as we've been moving up and when we've moved down, that's an area that's continually moving basically to the upside. the reason behind that is, you look at the valuations. they're not overvalued. great cash flows. this area can still go higher. >> steve suttmeier, how much technical damage are we doing here? >> you know, the nasdaq has all of the technical damage. first off, it appears broken, major trend supports. and i think the pattern has shifted on the nasdaq from buy the dips to sell the rallies. i heard some of the panelists before. i think we are seeing mega caps regain their mojo here. so i think they're positioned to do better. >> i'm wondering what you think
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about by yiotech. one of your counterparts talking about the nbi, looking broke and expecting it to breach significantly. a 200-day moving average. that could be a big negative. i wonder what the overall impact would be on the broader market if, in fact, it does that? >> well, i mean, first off, that is a pocket that's weak, along with discretionary names as well, and with the new technology. when you look at the nbi index, it does look positioned to fall further. one reason why this is the case is it got oversold. but it can't respond to oversold conditions. and that's a sound -- that's a sign that rallies are limited, and it's a sign that the index can fall further. so i think you're probably looking at, on the downside, 2,280 to 2,500. >> joe, analysts are coming out again, second day defending some of the momentum names that have sold off. we'll talk to the analysts a little bit later. it's the netflix, facebook, yahoo!. they say, hey, these stocks have fallen enough, maybe you want to
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take a look. >> really. right. >> you don't think so? >> as eminem said, "here comes the cold water." no, i don't think so. you don't buy the falling knives. one of the reasons is the passive money, the mutual fund money won't be there. you want to buy something, buy the quality names that pete or jim and josh have talked about, an ibm like you did yesterday. >> at some point, the names will be a buy, are they not? >> not with my money. >> netflix is down 25% since the peak. >> so it will be a buy. >> yelp down 32%. tesla down 17. >> are you telling me it will exceed the high it's already made at 450, whatever it is? because if it's not, i don't want to buy it. i'd rather buy something else that will give me the growth, going to give me the appreciation, but overall, you know, going back tore one second, we're talking about -- i think everyone is too complacent. we have earnings coming up. no one is talking about financials. financials are an important part of the equation. >> the table will be set later this week. >> right. >> friday. >> it's an important part of the
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equation to go higher. financials are trading awfully. awfully. you want to talk about technical damage, look at goldman/sachs. there's the technical damage. >> the technical damage is goldman/sachs and morgan stanley almost exclusively, throw in citi, because of the news with citi. but look at jpmorgan and wells fargo and u.s. bank -- >> that's half the group. >> well, how about if i give you wells fargo, jpmorgan, u.s. bank, how are they trading? pretty good. >> jpmorgan is making the recovery off the litigation concerns. >> they're right off the 52-week high. so my point is -- >> but where were they relative to the names in 2013? >> i think the financials -- >> you think the financials -- >> i'm with joe on this. don't catch the falling knives on these high-flyer momentums as momentum has shifted. in the financial, they've been beaten down for a while. just leak we were talking about caterpillar, intel, games like citigroup and bank of america -- >> can we say they've been beaten down when they hit 52-week highs?
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you can't make that statement. there's a drop in goldman/sachs -- i'll acknowledge that. you look at the other name, citi, it's a different story. >> that's what i'm talking about. >> let's talk about the three. aig is trading well today. >> you agree the relevancy of their contribution to the rally, we're really not talking about it, and it's so important. you have to have the financials working. they have to have good earnings. and subsequent good -- >> you've heard me say that for a couple of years on the show. you need the financials for the rally. do i need goldman/sachs to rally? i don't think so. if the rest of the banking industry, throw in the regionals to perform, that will lift the market with the financials and goldman can be a lagger for a while. >> steve suttmeier, where do you see the financials shaking out here? a place to go, technical upside coming, or no? >> no, i think they're fine. when i look at the financials, relative to the s&p, there's a double bottom there. it has not been invalidated. i will note that i have noticed that the broker dealers,
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specifically the xpd index, the amex does look vulnerable. kbw banks, they look fine. i would say with what we said earlier. >> josh word, the last word and we'll put a button on it. >> i want to go back to suttmeier very quickly. steven, a lot of your work has suggested the rally is broadening. you point to the all-world index and a global rally. can the u.s. pause europe and emerging markets take the torch and lead the global marks higher? or does the s&p have to be back in gear for these other places to keep working? >> very interesting question. good cross-currents out there. the funny thing about it is, the rally on the s&p was confirmed by breadth. bearish reversal negated that a bit. so i think on a near-term basis,
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you could see rotation. -mile-an-hour emerging markets are performing better. you can see little periods of time where you can get tactical outperformance for emerging markets. the big picture, relative trend for e.m. versus developed, so we think it's a technical bounce rather than strategic. >> steve, thanks for being here. appreciate it. >> thank you. >> i want to put a button on it with you, pete. you talk about the old-cap techs you like. you not only like them, but you're adding to them in the weakness. >> microsoft, intel. take a look at texas instruments. another one of the names that when it sells off a little bit, that seems to be the opportunity for the next leg to the upside. >> all right. still ahead on "the half," it is one year since jcpenney replaced its ceo. the stock is down more than 40%. but wait till you hear why someone on this desk is a bull. then, we're going to talk to an analyst who likes netflix and
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yahoo! but one analyst says that's like catching a falling knife. think junk food, pet clothes, female ceos, they're all investable trends. we'll tell you how to invest in them later on. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.
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welcome back. it's time for the "trader blitz." four trades on four stocks making news. first up is ford, announcing that march sales in china are up 28%. year on year. joe? >> first time over 100,000 vehicles sold. i wish pety had told me about the ford story in china. they are passing hyundai. they passed toyota last year. passing nissan. they were late to the party, spent $5 billion, they're winning there. ford looks good. >> ford on the positive news, gm on the weakness. >> you know what, the temptation is to say gm. i've made that mistake in the past. i won't make it again. ford is giving you the evidence why it's going higher. >> today marks one year since jcpenney named mike ullman as its ceo. since then, the stock is down more than 40%. jim? >> scott, i don't want to talk about ron johnson or mike ullman. all i want to talk about is whether you can make money in this name. absolutely, yes. we're out of the winter
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slowdown. >> i see a debate coming up. keep it going. i'm listening. you have my attention now. >> all right. retail sales will grow as we come out of the winter slowdown. jcpenney has a perfectly fine piece of the pie. they don't need to grow it. they need the pie to grow. it will. they've got $2 billion of liquidity right now. that's plenty to get them through. they will survive. you'll make money in the stock. >> who's taking the other side? josh brown? >> josh has to take the other side. >> no, too many shorts in the name. and i think the next two points are more likely to be higher than lower. >> not only am i not taking the only side, i will pay a compliment to all those who owned the debt, bought the debt, the marc lasrys of the world, that proved the trade in jcpenney. >> gilead cutting the price of a drug. >> they handle over a billion prescriptions annually. a very expensive drug. they talk about 2013. 14% elevated on prices. in 2016, looking at over 60%.
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there's a reason there's pressure on now. i think express scripts is the better trade over gilead. >> first solar, one of the best performing stocks in the s&p. over 25% over the last month. josh brown? >> this is one of best looking stocks, if not the best looking stock in the entire market right now. this thing is up 20% since march 6th when the nasdaq peaked and is down by 6%. forward p.e. is still under 15. ge owns a piece of the property. i would be all over the stock here. >> when you say the best, you're saying this is -- >> technically. >> oh, okay. performance-wise, that's not what you're talking about? >> stock on a relative basis to its peers, to the overall market. the internals in the name. the momentum. everything about the way the stock is behaving looks great. fundamentally, it is not a high flier. it's a 15 multiple on the next 12 months' earnings. >> i'll take my eog over josh's personal -- >> listen, it's grown into the multiple. you have to admit, it's now
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cheaply priced. >> solar city cut in half in the last couple of months basically. this stock is up. why is that? because it's an undiscovered name still, even given the fact it's been a big winner. it's still not anywhere near as expensive as all of the mo-mo names we keep talking about on the show. the business has real momentum. solar will explode across this country in the next ten years, and first solar is the best way to play it. >> names like facebook and yahoo! have seen drops of 20% or more from their highs, and it begs the question, are the stocks on sale or falling knives? steve is out with a bullish call. jordan, welcome back to "halftime" show. >> glad to be here. appreciate it. >> is this simply a case of i look at names that i like and they've just fallen too far? this is a sale i just can't afford to miss? >> no, it's not just about their price in the market, which, of course, can swing based on the market's appetite for risk.
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rather, i'm also pointing to earnings related outperformance, or in the case of yahoo! a really easy to identify catalyst in the ali baba ipo that i think will happen in the third quarter without a hitch. they're essentially cheaper now than they were a year ago. >> i find people still having a hard time getting past, you know, yahoo! -- yahoo! the day after. after ali baba, right, we have this discussion every week, once you get past ali baba, what have you got? >> you've got over $30 billion in cash and ali baba stock. the stock is trading at 33 and change. i think we can make a decision about whether the market has the appropriate value for that. i look at yahoo! as a sum of parts story, and i believe ali baba eventually is worth over $200 billion with a fairly
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modest 20 times earnings multiple that supports that claim. so i think there's a lot of upside here. >> jordan, you have four names we're talking about here, and you're talking about strong earnings. of the four, who's going to give us not only strong earnings but really, really solid confident guidance? >> well, facebook doesn't guide specifically. but i think the magnitude of the upside will have this -- will force downstream my numbers to go up the most. i'm disappointed by the experimental acquisitions for $21 billion. i couldn't even come close to explaining what they paid there. but that said, i don't think they would have done this if they weren't very confident about their core business, and i expect the upside to be another inflection point where you see acceleration on a year-on-year basis. i like netflix here, and covered by my colleague ben trogal up in toronto, and i think at the end
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of the day, the real story remains netflix. and i think the subscriber growth number you'll hear both in the fundamentals and in the guidance will be very, very strong. >> you're not at all concerned, jordan, that these momentum names are just broken to a point where you've got a lot more downside to go, and this could be a falling knife trade? >> right, well, by the time the broader media tells me they're going to continue to go down forever and you should hide and buy gold and never buy anything that grows, right before an earnings season, usually some of that is dialled in. i am not a believer that markets go straight up, straight down. i've been in this business long enough, i believe high-quality growth stories, with earnings outperformance, that's a good recipe. >> what's your price target on netflix? >> netflix, i think, we're at 475 on a price target. again, it's covered by ben mogul, our analyst up in toronto.
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>> your price target on facebook? >> facebook is 82. and i believe in that one. even if it's on sale here. but that the earnings will remind people why the story's so good. >> well, the stock is moving to the highs of the day. thank you for coming on, jordan. >> my pleasure. >> guys, let's trade these. >> facebook troubles me. jordan put his finger on it. these experimental acquisitions, the currency -- >> he gave them the benefit of the doubt. >> well, you know, here's the thing. i'm not going to give them the benefit of the doubt on, they're using their stock. that's their way of saying we don't care about $21 billion because it's funny money. that's a troubling sign. >> maybe they're flexing their muscle, pete. >> the one that i really agree with him 100% on is yahoo!. i know you guys seem to have much more skepticism about this. when you get -- >> i like it. >> okay. when you get to 30-plus-ing about, i don't know it's a mo-mo stock at all, and you talk about ali baba, and yahoo! japan, and
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they have the ad and content -- >> it's a good business. >> -- yahoo! is at the levels. netflix is the questionable one, because they'll have growth, and they have the internationals thing. but are they done falling? and this feels like -- >> 475? >> a pretty high multiple. >> 82 for facebook, yeah, i could see that. >> josh, you were saying? >> here's my problem with yahoo!. i agree they have a lot of interesting initiatives out there. and something could hit big ma marissa is working on. these are really talented people. she has demonstrated zero ability so far, not to say she can't, but so far, she has not demonstrated she has any ability to put this cash to work and get a return on her investment. the only thing we've seen so far in terms of that is $100 million for a head of ad sales that gets kicked out a year later. so it's totally on note at this point. by the way, apple had $150 billion in cash, and it didn't help. so handing her $30 billion, i
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don't know if that's a -- >> apple wasn't worth $150 billion in total. right now, you look at yahoo! it's worth $32 billion market cap. that's a huge differentiation. >> i agree. i don't believe it's enough to buy a tech stock. >> let's give her credit. stock was 25 last summer. >> she stopped the bleeding. >> she's terrific! she just hasn't proven that she can put -- >> she took the stock from 25 all the way close to 40. >> and she has a strategy out there. the mobile, and actually executing on that, as well, just like we heard from zook originally about a year ago. >> show me top-line growth and i'm dead wrong. >> like kevin ollie didn't win the championship last night, because he didn't win by 20 points. >> how much of yahoo!'s appreciation from 25 is ali baba related if you had to take a guess? i don't know for sure, but i would say a lot of it. >> i know for sure this conversation is dead. coming up, the portfolio moves are done. we had two yesterday, and another one is happening today. just something about this market
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has the guys spooked, or confident? that's after the break. first, look at the nasdaq be. stocks leading the way higher after the big sell-off in the past few sessions. there's a look at the names. all getting a nice bump. better than 3% across the board. make it happen
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on one gallon of fuel. what a day. can't wait til tomorrow. there it is. it's time to check the leaderboard, see who's winning our battle for trader of the year. it hasn't changed much. joe still holding onto the top spot, up almost 10%, followed by john najarian, then josh brown, mike murphy, all of the guys in positive territory. just quickly, joe, palo alto networks has been the trade that's worked more than any other in the networks.
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>> palo alto has been getting slammed. the best thing i did was getting out of palo alto when i did after earnings. again -- >> how much was it up before you got out of it? >> it was probably up -- >> 26%. >> 20-something-percent. >> that's kind of my point. we're finished here. >> okay. [ laughter ] >> good news, bad price action, paolo alto, that's why you get out. >> okay. josh brown? >> hi, scott. how are you? >> i'm good. i'm going to read what's in the prompter now. it wasn't double-secret probation on "animal house" but a double short. we're talking about your biotech. >> yeah, the timing worked out well. to some extent, i got lucky, when you do a double short with etf, it's negative compounding. when pete pointed out, you really have to have it not just work out, but work out immediately. that's what ended up happening here. fortunately. so i've learned a long time ago when you're doing something for a trade, don't let a winner turn
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into a loser. so i got out of it this morning. it's about a 20% gain. i think the biotech space is due for at least a short-term bounce. i would not be an investor in the space, because as our earlier technician guest reminded us, there's a lot of weakness here. it's an inability to really bounce hard. but i want it to close out, lock in the gain, and i'm glad i did. >> you have sold out of the double-short biotech etf? >> yeah, the sector dropped after i announced it. >> a great trade. >> thankfully. you get lucky sometimes, and they work out quickly, which is the case here. so i think i'll take it. >> "squawk box" is getting in on the pocket-pick iing gains. >> i think it's the most interesting of the three.
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it has a larger market cap. we've been following this name, you know, over the period of time. and when you really are looking at it, scott, what's really been going on. we talked about technology, at the top of the show. we talked about big data, about the cloud. that's part of the reason why you kind of like something like hewlett-packard now. microsoft, the direction in which they're going. western digital. seagate, these kind of names. this falls into that category. european company, very interesting in what they're doing, and i love the fact that they -- their growth, joe, their revenue growth per quarter and last year, just continues to grow. trades at a pretty high multiple. but yet it's still an interesting company. >> european plays a role in the european recovery. co-location, a big theme now. potential m&a target. not afraid to go out and spend on their own, and as pete highlighted, the growth in revenue continues to be on their side. >> okay. as the situation in ukraine heats up, the u.s. will speed up nat gas exports.
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hey, mandy. >> hey there, scottie. one of the things ukraine depends on russia for is natural gas, right? and the u.s. produces plenty of that. there are tight restrictions on exportds. some in congress wants that to change. let's talk to the guys that know about it. jim, what are the chances that the u.s. turns into a major nat gas exporter? >> i don't think it will happen. i think politically we're somewhat dysfunctional, and the people on the left don't want to open the floodgates and export oil or natural gas that will drive prices up. i don't think that will happen. i don't think the nat gas, particularly trading on this concept either. i think it's still more linked to weather in the biggest part of the country, and it's going higher from here. >> and what about you, griz? higher, as well? >> absolutely, mandy. there's no doubt. nat gas trades $15 to $18, and the trade $4.50 here. if we're punishing russia, we'll
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be punishing ourselves, because prices will rally here. we haven't had the full potential of natural gas usage here. so i think we should deal with that first. >> it almost feels like damned if we do, damned if we don't. thank you very much to both of you. i'll check in with you later. we have a live show at 1:00 p.m. eastern, where we're joined by l louise yamada. scottie, back over to you. >> all right. we'll be there. still ahead on "the half," looking for some correction protection? we go live to the new york stock exchange to find out what move the traders are making today, and what do drones, candy crush, and clothes for dogs have in common? ♪ i want to be rich we have the details. here's a look at what's moving now. there it is. a lot more green than red on the board today. ♪ ♪
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okay, we're watching the marketings trying to snap back today. we want to get correction protection from bob pisani on the floor of the new york stock exchange. i've been reading your trader notes which has interesting notes about the vix and what it's reflects or perhaps not reflecting. >> i'm not sure it's reflecting the fear in the market. a lot of people said there is no fear in the market, because the vix or volatility index is not moving that much. i agree. but the observation that there isn't fear isn't right. there is fear. it's not being expressed in the vix. traders are going other places to buy protection. the reason is there are more option choices available and more etfs available. >> okay, pete. so bob's point, basically, you look at the vix, at 15. >> yeah.
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>> that's not reflective -- >> it doesn't sound that big, right? friday. a couple of trading sessions ago, we were talking about it on this show, it dipped underneath 13. you know how many puts traded that day on the spdr, 2.6 million options on the puts alone on friday. so i understand what people are talking about. they're saying, hey, it's not a huge ride. when people are in there, we talk about buy them when you can, not when you have to. people were buying them when they could. the vix was underneath 13. opportunity to buy. it's like buying a stock at a lower level and selling at a higher level. this is an opportunity at times when you get the spikes, so maybe you start to take some of that off, scott. because when you look at a percentage basis, from under 13 to 15.5, that's not bad. >> i'm wondering what this tells us about sentiment, what the feeling in the market is, if you have a vix that's basically sitting at 15. >> here's a problem i have. and, pete, just for the record, three years ago i got in the vix, a terrible mistake, long
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the vicks. i don't have the chart in front of me. it's been three years since it went above 20 in a meaningful fashion. 20 would be a ho-hum number, if you go back 20 years ago, 25, 30. that's where real fear comes in. are we saying in the last three years, there hasn't been a moment where the vix deserved to trade above 20? i say it does. the vix is broken. it isn't working the way it should. i can't tell you why. i think it has to do with quantitative easing, but it is broken. >> i don't think it's broken. part of the rationale is what bob pisani was going to trade on. you can trade the vix, the spdr, the xlk, the xlf, so many areas to buy protection, depending on where your portfolio sits right now, it's not the ultimate. it's still a great measurement for the s&p 500. >> bob, go ahead. >> let me go back to the point i was making in the xlk. the xlk has been down the last few days, and also options that are available for all of the s&p sectors, including the xlk.
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you can either short the xlk directly or buy put options on the xlk. what we're seeing is the put-buying has been active in recent days in the xlk, and that's not showing up in the vix. it's a broader problem. getting the protection the traders want. the problem shorting the xlk is it's heavyweighted with the big-cap names like ibm. more etfs in the space. my experience is these funds are very thinly traded and difficult to borrow in general. so most of the guys i talk to, if you want to short the internet names, they go directly to shorting the individual names. this is also true with the biotech etf. you can buy options on in you can short it, as well. but be very careful. it's important to have a sense of when a reversal may be about to start, an it's important to look at how many people are out there shorting, because that's shares that have to be bought back. >> hey, bob -- >> look at the eem, scott. everybody and their mother has been short now. it's a crowded short. look what happened two weeks ago
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when the chinese started talking about stimulus. the eem is up. >> do you have a quick way, before we run, a thought on whether the vix is broken or -- did you hear the debate -- >> right, not that it's broken. it rely reflects what's going on in the overall market. there are too many places to go to get options and etfs out there. the guys out there worried about the markets right now, worried about their biotech and worried about the internet investments, they're not going to the vix. they're not sharping the s&p 500. they're shorting instruments specific to the areas they're investing in. what would move the vix is if the s&p 500 dropped 5% in two days. you'd see the vix shot up over 20 very quickly. >> and the point to that is we have not -- [ overlapping speakers ] >> -- contagion thing. >> right. we haven't seen that. to your point, bob, we've seen nothing like that. >> right. >> like you mentioned earlier, moments. we've had moments of a move. and then the move has dissipated away. that's what the vix is measuring.
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how much fear is in there at that moment, and if that moment extends or not. >> for the overall market. so we are seeing a lot of fear in the internet names, a lot of fear in biotech. but guys have figured out ways to play that fear and buy that protection overall. the market is fragments, and the ways to protect yourself are much vaster, ask pete and jon, they'll tell, it was three, four, five years ago. >> bob, thank you very much. when we come back, something strange is going on. ebay is on pete najarian's radar because of unusual activity. we'll find out if the action is bullish or bearish. have you heard of the expression getting paid to wait? investors are piling into stocks that pay big, fat dividends. a special edition of trade school is coming up next. ♪ [ male announcer ] when fixed income experts... ♪ with equity experts... ♪ ...who work with regional experts...
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[ male announcer ] open your eyes... to the 6-cylinder, 8-speed lexus gs. with more standard horsepower than any of its german competitors. this is a wake-up call. ♪ coming up at the top of the hour, we hope you'll join us. four big questions for investors right now. get out of trampled tech. should you buy the big caps? mind the mid caps? should you sell your house, your adolescent children. we'll answer those questions and more for you next hour. tech. does consumer discretionary, health care, the worst performing sectors since the march 4 peak, the stocks dragging down the three groups. we'll highlight them. we'll talk to under-the-radar
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fund managers about how they are beating the market. it's part of a new series on "nest eggs" starting on "power lunch." back to scott and the "fast money" group. >> thank you. how about basing your investments around a hot trend? ardip joins us with three popular trends. welcome back. >> thanks for having me. >> an interesting market to be investing in regardless of the trend you're trying to follow. explain how this works. >> a motif, as an index-based portfolio stocks, built around an idea we can understand. healthy foods, warfare, water shortage. our traders like to think of them customizable no-fee etfs. >> anybody can basically go to your site and pitch an idea, so to speak, of forming a motif around two investments. >> our ph.d.s have built 120 motifs.
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our customers have built 35,000. you can get paid if someone buys one of your motifs. >> what are some of the hottest motifs, trends? >> three motifs we're looking at closely. one is renter nation. you're seeing homeownership at its lowest point. you're seeing rental vacancies at the lowest point. that's translating to a growth of rental reits that's outpacing inflation by 2x. they're expecting 4% this year. >> so this is a basket that's filled with apartment reits and things like that. >> exactly. it's skewed towards the west coast, and that's doing really well. it's actually in the first quarter, up 12%. the housing recovery motif is down 6% during the same time period. >> how about this modern warfare? >> modern warfare. think smart bombs, drones. everyone thought sequestering, the government cutbacks, not the place to be. this etf is beating by almost3 x, up almost 60 points. it's done 12 points.
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and two trends going on. even with the cuts in the u.s., there's a higher roi spend. and asia outpurchased europe for the first time ever last year. and now, 20% of revenues from the companies is coming from the emerging markets. it's an interesting play, one that most people didn't expect. >> tell me about the ipos. there is a significant debate in the market right now, as you know, as to whether things are too frothy, whether there's too much supply coming onto the market, and now a motif of ipos. that makes me nervous. >> it's a way to track what's happening. this skews heavily towards -- these are the most recent ipos weighted by the amount. the average pop of an ipo in 2014 is 22%. it was 17%. industry average about 12%. so this is a nice way to track if you believe there's something. you have interesting stocks coming on on market. this is a nice way to think peter lynch meets jack vogel. >> guys? >> i like this idea a lot.
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do i understand people can go to their website and design their own etfs, because there are hard areas to invest in, and it sounds like you're crowd sourcing. >> yes, we have a motif for obamacare. >> okay. potable water? >> absolutely. we've got six motifs in the water category. >> a great idea. >> it's a nice way to get people out from, helping us create ideas. most people don't know -- they don't have the skills you do, which stocks do i pick. this is about creating an index. >> sometimes the skills need help. it doesn't matter how skilled you are. having other people with input is a good idea. >> what about the themes of renter nation and ipos -- >> renter nation i think is intriguing. the ipo motif scares me. to me, that's concerning. i like renter nation. >> the modern warfare. >> i like it, as well. >> it's beating all etfs in its category, by 10 to 12 points over the last year because of the skew to higher roi.
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people are cutting conventional warfare, and that's why you're seeing the trend. >> the site is called? >> >> so you can check that out and maybe a motif for something that you suggest. good to see you, as always. >> thanks for having me. coming up, the dividend payers. are they the right place to invest in now? we'll trade school after this short break.
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. welcome back. is it a smart move to get paid to wait? or is it actually a risky play if rates go up? josh brown? >> well, anything that paying a yield is going to be weight sensitive to some extent, but i think the different payers are really over-owned. a lot of these so-called smart beta strategies have loaded up. >> i don't know, stay with what's working in some respects, right? >> anything can work in a given period of time. the idea is to go where people are going to go next. from that standpoint, preferreds are a way under-appreciated area of the market. it's been crushing the s&p, up about 7% in total return. this is basically an index etf that buys the biggest issuers.
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the current yield is 6 1/2, which is much more than ear getting from junk bonds. the big risk is credit risk, but the thing is the bank balance sheets have been healthier than they've been in almost a decade. between basel 3 and frank/dodd. >> guys different payers, over the last month, at&t, intel, kellogg, okay? they each have a nice yield and all been positive. is that the way to play this year? stay in the different payers? >> let's realize those names were pretty well cheapened during the last year. they didn't rally as well. but the key thing here is if you're going to own dividend payers, they have to grow their dividends, so things tied to commodities will often have a chance to raise their yields as the economy picks up everybody
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so master limited partnerships, oil exploration companies, those sort of things appeal to us, but dividends are one part of the overall evaluation equation. >> i think dividendses get very complicated, go by dvy, a dividend dtf, it's done for you, it's out3r678d so freres this year, but i think ultimately the 2014 story goes back to cap ex and growth. ebay is the name we're seeing this in. obviously this is a carl icahn story. a lot of people have talked about the fact he's trying to push the board in a different direction and some of the processes. when you look at this. may 5, may 60 call spread, 10,000 of those were bought today, traded around 1.20, but expecting to see this stock move over the next four to six weeks when these expire. very, very intriguing. >> you're going stay in it?
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>> i was in it before this trade. i did not add to it today because i'm already in t. but i expect to see this move. i feel like the carl icahn side of this puts basically a put on the stock, so i look for more up side and feel like i'm protected to the down side. um canning up on the half, there is movement in emerging markets you need to know about. that's coming up next.
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serious investors are choosing fidelity. call or click to open your fidelity account today. welcome back to "halftime report." if you're looking for a bigger bounce, check out emerging market stocks. the eem is up about a percent and a half, a lot better than the s&p 500. on a more regional basis, though, china up 2.5%. brazil has lost a bit of steam, so emerging markets investment, scott, have been maybe unfavorable before, maybe worth looking at again. >> let's be quick, pete.
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worth looking at? >> absolutely. it's one of the areas we look at with the commodities. it obviously plays into the ground of emerging market. >> remember we had jordan rowe on, talking quite positively about facebook, netflix and yahoo!. we saw the stocks rising to the highs of the day. there's a look at facebook, up better than 2%. netflix as well. there's a lot of talk in the market, guys to how far some of these things could fall, but jordan is out defending them today and the stocks are on the move. >> they are, but i d believe in the story. there's a lot going on out there, which we'll talk about in a minute, to suggest counter to that. the yen is -- >> talk about that. >> it's making a huge move. consumption tax rise, what concerns me most is that in february, when the yen spiked, the speculative community, the hedge fund community basically doubled down on that trade thinking the yen was going to go
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lower, this trade was long nikkei, short yen. yen is a3r067ing the 200-day moving average. why is it piking 1% out of nowhere? they need a massive policy response. if they don't get it, it's a concern global, derisking occurs, that's why i'm suspicious of the rally. inch josh, one to pay close attention to? >> i think joe's nail nailed it. there's something else we're not talking about, which is the strong potential for upyarp qe, which would also have some significant impacts not only on emerging market ecwinters and currencies, but also in the u.s. keep in mind, european small caps have been leading global markts for a couple months now on this prospect. a german newspaper the other day just mentioned we could be thinking about a trillion euros of bond buying, by the ecb, and i don't think that's on anyone's calendar just yet. >> all right. let's do some final trades. jim?
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>> citigroup. i think you have an easy 10% to 15%. >> joe? >> fxy. >> pete? >> i like the ebay, i like the cash flow. >> josh, quick. >> analog devices, going higher. you guys have the great west of the day. "power lunch" begins right now. halftime is over. "power lunch" and the second half of the trading day starts right now. >> scott, gentlemen, thanks very much. take a look at this chart. that is a sketch of a bad month. those three are the worths-performing sectors in the s&p 500 over the past four weeks. you so el them down to 2%, well, health care down 4.5%, consumer discretionary almost 6%. those are the numbers, including many big retail names. dahl we're going to look at teen retailers. a lot of work has been done in that space. we'll


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